Actually, America Is Massively Slowing Its Debt Binge

Today’s Flow of Funds report from the Federal Reserve shows that the U.S. grew its debt at the slowest rate in a decade during the third quarter of 2009.While federal and state debt exploded higher at a 20.6% and 5.1% annualized rate respectively, the private sector continued to massively deleverage.

Thus America, as a whole, is slowing its debt binge.
[image url="http://static.businessinsider.com/image/4b2140f20000000000a7c45a/image.jpg" link="lightbox" caption="" source="" alt="Actually" align="left" size="xlarge" nocrop="true" clear="true"]
The reason why we often miss this fact is that we like to focus on the government’s debt only, without also considering private individuals and companies — which are huge.

America is an economy very much driven by the private sector, thus data for the government’s balance sheet alone doesn’t give a fair picture for the health of the nation.

Federal Reserve Statistical Release 10 Dec 2009: Debt of the domestic nonfinancial sectors is estimated to have expanded at a seasonally adjusted annual rate of 2¾ per cent in the third quarter of 2009, about 1¾ percentage points slower than in the previous quarter. Private debt contracted in the third quarter, while government debt expanded.